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February 16, 2011

Borders bankruptcy bad for consumers?

borders bankruptcyBorders, the nation's second largest booktore chain, filed for bankruptcy today and plans to close about a third of its stores -- steps that had been expected for weeks, if not months. The company was squeezed in two directions -- the bricks-and-mortar competition with Barnes & Noble and the digital fight with e-retailers such as Amazon. And it was slow to develop an alternative to Amazon's Kindle and B&N's Nook.

 

The move gives Borders room to breathe and cut its debt, but unless the company can regroup in a hurry, it may never regain prominence. And any time a big competitor drops out of an industry, consumer choice is cut -- which is usually bad. Today, though, the loss of Borders and its stores will have less impact because digital books have become so popular. Borders wasn't a huge player online, and pricing competition has been driven by retailers such as Amazon and Walmart. As more and more folks buy e-readers, that market will increase rapidly, and Borders will be missed less and less.

Sales at Borders declined by double-digit percentage rates in 2008, 2009 and in each quarter in 2010 it has reported, according to Reuters. Borders, which has 6,100 full time staff, operates 508 namesake superstores as well as a chain of smaller Waldenbooks stores. No word yet on the fate of Baltimore-area stores; I'll keep you posted as the details trickle out.

Posted by Dave Rosenthal at 10:35 AM | | Comments (1)
        

Comments

Borders is a favorite but as stated in a post about a month ago I can see there are some issues going on. It would be a shame to see them go. They offer an alternative to B&N. Hopefully they can get back on track.

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About the blogger
Dave Rosenthal came to The Baltimore Sun as a business reporter in 1987 and now is the Maryland Editor. He reads a wide range of books (but never as many as he'd like), usually alternating between non-fiction and fiction. Some all-time favorites: A Confederacy of Dunces by John Kennedy Toole; Wind, Sand and Stars by Antoine de Saint-Exupery; and anything by Calvin Trillin or John McPhee. He belongs to a book club with a Jewish theme.
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